‘A Court of Appeal decision upholding the parties’ choice to use English law under a swap agreement will provide some relief to financial firms despite the ongoing uncertainty around the UK’s decision to leave the EU, an expert has said.’

“It has long been recognised in English law that as an exception to the rule in Foss v Harbottle a member of a company may bring an action on its behalf against wrongdoers who exert control over the company and who are preventing it from enforcing its rights, i.e. the single derivative action. A multiple derivative action potentially arises where the proposed claimant is not a member of the wronged company but is a member of the ultimate holding company. Since the coming into force of the Companies Act 2006, there has been considerable debate as to whether that legislation removed the common law double derivative action or even, in some quarters, whether such a common law action ever existed.”

“A derivative claim brought by limited partners in a partnership, in the partnership’s name, against the partnership’s manager was permitted where there were special circumstances to justify such a claim.”

“‘Wrongdoer control’ of a company was not an absolute preclusive condition for the bringing of a derivative claim. However. where proceedings clearly could have been brought in the name of the company and no objection was raised on that ground, they should be so brought.”

“A beneficiary under a will who had commenced proceedings against solicitors he alleged had acted negligently in connection with the estate could not, after the relevant limitation period had expired, amend his claim so as to also claim on behalf of the estate by way of a derivative action.”

“When the court gave permission for a personal claim, brought by a beneficiary of an estate in his personal capacity, to be continued as a derivative claim on behalf of the estate, the personal representative or administrator had to be joined as a party to those proceedings.”

“Where a beneficiary of an estate brought a derivative claim, the personal representative had to be joined as a party, since the situation was indistinguishable from that of a derivative action brought by a member of a company or corporate body, in which the company had to be joined as a defendant under CPR r 19.3.”

“Where the question of ratification arose in the context of an application to continue a derivative claim, under s 261 of the Companies Act 2006, the court should ask itself whether the ratification had the effect that the claimant was being improperly prevented from bringing the claim on behalf of the company. That also applied where the connected person provisions in s 239 were not satisfied but there was still actual wrongdoer control by which there had been a diversion of assets to persons associated with the wrongdoer, albeit not connected in the sense provided by s 239(4).”

Sign up for the daily email

“I cannot praise highly enough the Inner Temple Library blog. The librarians provide a comprehensive survey of the legal world as they locate and dispense relevant information from a wide variety of sources, from government websites, to professional organisations in addition to both mainstream and legal media; it is rather like having your own personal desktop librarian hunting out interesting articles for you.”